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Our Competition (Peer39) Gets Bought - 5 Thing They Did Wrong

We took note last night of the announcement that one of our main competitors, Peer39, had been sold to MediaMind (see announcement below). We know Peer39 had raised close to $30 million yet the purchase price was half of this. This suggests a forced sale by the investors and got us wondering what mistakes Peer39 had made in the contextual (semantic) data targeting wing of the ad technology ecosystem.

5 things occur to us. Some of speculative of course but knowing enough about them and hearing more on the street we feel pretty confident in these.

1. Peer39 focused too much on ad agencies and not enough on publishers.
2. Peer39 blew a lot of money trying to “boil the ocean” to place their version of semantic tags into an RTB environment hoping someone would pay for them and found buyers only for a small % of them.
3. Peer39 changed direction too many times. You get one good “pivot” as Fred Wilson likes to say. 2 or more makes you look like you don’t know what you are doing.
4. Peer39 wanted to be a semantics company who happened to be selling into advertising rather than an advertising technology company that happened to use semantics as a market entry point. Witness the R&D labs in Israel.
5. Peer39 spent a ton of marketing dollars promoting a Baysian approach to NLP in the hopes that if they danced hard enough no one would notice the approach wasn’t very good. The market did notice.
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